Getting UK offshore wind back into fighting shape

The UK is currently off track to meet its 2030 offshore wind targets, facing a capacity shortfall of approximately 20-22 GW. While a sufficient pipeline of potential projects exists, the report argues that policy failures—specifically low strike prices in recent Contracts for Difference (CfD) auctions—have stalled development. To course-correct, the report recommends increasing the budget for the AR6 auction, shifting the CfD focus from price competition to delivery scale, and implementing strategic industrial growth plans to support the supply chain.

• The UK faces a significant capacity gap to meet its 2030 offshore wind targets. With 14.7 GW currently installed and 13.3 GW committed or under construction, there is a shortfall of over 20 GW (specifically cited as around 22 GW in some sections) required by 2030. While the total pipeline of potential sites is sufficient at up to 93 GW, rapid progress is needed to move these into active deployment.
• The Contracts for Difference (CfD) auction mechanism is the primary route to market but has recently failed to attract investment. The 2023 auction (AR5) failed to attract any offshore wind bids because the maximum strike price was too low. This follows a decade-long price drop from £150/MWh to £37.35/MWh, which, combined with inflationary pressures and supply chain competition, has put projects like the 1.4 GW Norfolk Boreas wind farm at risk.
• The upcoming AR6 auction is projected to fall short of the capacity needed unless the budget is increased. To meet targets, approximately 10 GW should be commissioned from the 2024 (AR6) and 2025 (AR7) auctions combined. However, only 3-5 GW is projected to be supported in AR6 under current parameters. A 25% increase in the AR6 budget could potentially deliver an additional 1 GW of capacity.
• Expanding offshore wind capacity is presented as a critical tool for reducing the UK's exposure to volatile global gas markets and lowering energy costs. UK offshore wind is already 60% cheaper than fossil gas on a levelised cost basis, with a forecast to reach 70% cheaper by 2030. Every 1 GW of installed offshore wind is estimated to displace enough annual fossil gas consumption to heat 630,000 homes.
• The report advocates for a fundamental shift in the CfD approach, moving away from a 'race to the bottom' on price toward a focus on delivery and scale. Proposed alternatives include a single large auction with a preset strike price or a rolling auction process. Additionally, the report suggests implementing the 2024 Offshore Wind Industrial Growth Plan to boost manufacturing jobs and supply chain resilience.
• Developers are beginning to explore innovative revenue models outside of traditional full-subsidy CfDs to manage financial risks. Some are adopting a 'revenue stack' approach, where only part of a wind farm is supported by the CfD process while the remainder is sold on the wholesale market or to third parties. Examples of this model include the Seagreen offshore wind farm and the Moray West project.

APA

Ember (2024). Getting UK offshore wind back into fighting shape. https://ember-energy.org/latest-insights/uk-offshore-wind

Chicago

Ember. Getting UK offshore wind back into fighting shape. 2024. https://ember-energy.org/latest-insights/uk-offshore-wind.

Wikipedia

{{cite report |author=Ember |title=Getting UK offshore wind back into fighting shape |date=11 July 2024 |url=https://ember-energy.org/latest-insights/uk-offshore-wind |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{ember2024getting, author = {{Ember}}, title = {{Getting UK offshore wind back into fighting shape}}, institution = {Ember}, year = {2024}, month = jul, url = {https://ember-energy.org/latest-insights/uk-offshore-wind}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }